History

Group finance is universal.

Long before banks reached most people, neighbors pooled their money in turns. Economists call it a rotating savings and credit association, or ROSCA. Most people just call it the circle.

A short history

Generations of trust, one turn at a time.

  1. Before banks

    An idea people kept inventing.

    A group agrees on an amount and a schedule. Each round, one member takes the whole pot, until everyone has had a turn. Anthropologists comparing these groups have found them on nearly every continent.21

  2. 1200s · Japan

    Among the oldest on record.

    Japan’s tanomoshi-kō, village mutual-aid groups that pooled savings and rotated credit, are traced to at least the Kamakura period. Similar hui associations ran for centuries across China.910

  3. West Africa

    Woven into everyday economic life.

    Among the Yoruba, esusu groups were an established credit institution when the anthropologist William Bascom documented them in 1952. Across the region the same practice goes by susu, njangi, tontine, and many other names.32

  4. Across oceans

    It traveled with the people who kept it.

    Circles crossed the Atlantic and the Pacific with migration, forced and chosen. In the Caribbean they became partner and susu. In American cities, Chinese, Japanese, West Indian, and Mexican communities used them to start businesses that banks would not finance.845

  5. Today

    Still running, mostly on paper.

    Economists explain why circles last: members reach a large sum sooner than saving alone, and trust replaces collateral. Many circles are still tracked in notebooks and group chats. RAITON keeps that record without ever holding the money.67

Three you may know

Same idea, many names.

West Africa and the Caribbean

Susu

Also called Esusu (Yoruba), partner (Jamaica), sou-sou

Members pay a fixed amount, often weekly or monthly, and one person collects the full pot each round. From Nigeria and Ghana to Trinidad, Jamaica, and their diasporas, it remains a trusted way to save for rent, school fees, and travel.38

Mexico, Latin America, and the United States

Tanda

Also called Cundina

Coworkers, neighbors, or relatives each pay in on payday and receive the pot on an assigned number. An early number works like an interest-free loan; a late one works like disciplined saving. The anthropologist Carlos Vélez-Ibáñez described the confianza, or mutual trust, that holds it together.5

China, Taiwan, and the Chinese diaspora

Hui

Also called Biaohui (bidding hui)

Hui means “association,” and it is among the longest-documented circles. Many hui decide who takes the pot by bidding, so a member who needs money sooner pays the patient ones for the privilege. Chinese immigrants in the United States used hui to fund businesses when banks would not lend.1064

Njangi, chama, kye, paluwagan, arisan, stokvel, equb, and more: see them on the map

Bibliography

Read further.

  1. Geertz, C. (1962). The Rotating Credit Association: A “Middle Rung” in Development. Economic Development and Cultural Change, 10(3), 241–263.
  2. Ardener, S. (1964). The Comparative Study of Rotating Credit Associations. Journal of the Royal Anthropological Institute, 94(2), 201–229.
  3. Bascom, W. R. (1952). The Esusu: A Credit Institution of the Yoruba. Journal of the Royal Anthropological Institute, 82, 63–69.
  4. Light, I. (1972). Ethnic Enterprise in America: Business and Welfare among Chinese, Japanese, and Blacks. University of California Press.
  5. Vélez-Ibáñez, C. G. (1983; expanded 2010). Bonds of Mutual Trust: The Cultural Systems of Rotating Credit Associations among Urban Mexicans and Chicanos. Rutgers University Press. Updated as An Impossible Living in a Transborder World (University of Arizona Press, 2010).
  6. Besley, T., Coate, S., & Loury, G. (1993). The Economics of Rotating Savings and Credit Associations. American Economic Review, 83(4), 792–810.
  7. Ardener, S., & Burman, S. (Eds.) (1995). Money-Go-Rounds: The Importance of Rotating Savings and Credit Associations for Women. Berg.
  8. Handa, S., & Kirton, C. (1999). The Economics of Rotating Savings and Credit Associations: Evidence from the Jamaican “Partner”. Journal of Development Economics, 60(1), 173–194.
  9. Odo, F. (2013). Voices from the Canefields: Folksongs from Japanese Immigrant Workers in Hawai‘i. Oxford University Press, pp. 34–35.
  10. Lowenstein, M. (2024). Rotating Savings and Credit Associations (ROSCAs) in Prewar China. The Economic History Review, 77(3), 796–822.

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